NexGen Energy (AU): A premium asset at a reasonable price – Initiate at Overweight

We initiate coverage of NexGen (NXG AU) with an OW rating and Dec-27 A$18.10/sh PT (+35% upside). NexGen becomes our preferred ASX uranium exposure. We are constructive on uranium long-term, and think the portfolio screens favourably in terms of grade (>2% U3O8), scale (>10% market) and jurisdiction (Canada). The project is fully permitted (unlike peers), appears well supported by funding providers, and we see a path to a multi-decade mine life as adjacent prospects (e.g. Patterson Corridor East, PCE) are integrated into the mine plan. While construction is not without risk (JPMe 6-month delay, +50% capex), we see potential negative headline risk as longer-dated (12+ months) and, at ~0.89x P/NPV or ~US$75/lb implied pricing, we see the risk-reward as attractive. Our base case assumes a full funding package in the next 6-12 months, with a mix of prepayments (~C$1.4bn) and equity (~C$1bn) in 1H CY27 and a debt drawdown in CY29. Steady-state EBITDA is C$2.5-3bn (or FCF C$1.8bn).